Rants and raves about the mess of higher education in the United States.

Saturday, October 27, 2018

Mainstream Rag Asks Why College Is Expensive…Has No Clue.

By Professor Doom

There is a huge
problem brewing in this country: student loan debt. Some 44,000,000
people have this kind of debt (minimum, there are many
accounting tricks to make this number appear lower than it is), and for many
it’s so large that they’ll never be able to pay it back. They can’t get rid of
it through bankruptcy, either.

This is a huge
subset of the population, basically the whole next generation. This problem has
been growing and growing, but most people are, at best, only dimly aware. Some
porn star has sex with some politico, and it’s big news even though it affects
less than half a dozen people, but this devastating problem for tens of
millions of people just doesn’t make the mainstream media much.

A recent article
demonstrates just how dimly this country seems to be aware of the situation…and
I’m in the mood to pick on the rag:

Before chuckling
at The Atlantic’s laughably insipid musings on the matter, I feel the need to
highlight a basic economic principle: if you increase demand of a commodity,
the price will rise. Now, yes, there’s always been a demand for education, but
this country has an excellent library system. The government’s student loan
system didn’t increase demand for education, but it did increase demand for an education at an accredited school.

If you don’t care
about accreditation, you can hire a tutor for $50 an hour to come and talk to
you about fairly advanced subjects—a typical college professor doesn’t make
this much, and a typical course charges about $150 an hour for the student to
sit in a huge classroom and listen…honest, it’d be better for both student and
teacher if we didn’t have the huge education bureaucracy in the way.

Anyway, college
is expensive because of this basic economic principle: the massive student loan
programs are fueling a huge demand for accredited education. What does The
Atlantic have to say?

“Spending per student is exorbitant, and it has
virtually no relationship to the value that students could possibly get in
exchange.”

Yes; as I’ve
documented extensively, accreditation is a fraud and has no relationship to
education quality. So, about the question?

What confusion of
ideas is necessary to view the above as anything but symptoms of spending out
of control? If the above were the real problem, then a “cheap” school could
skip the above.

It turns out that the vast majority of American
college spending goes to routine educational operations—like paying staff and
faculty—not to dining halls. These costs add up to about $23,000 per student a
year—more than twice what Finland, Sweden, or Germany spends on core services.

Yes. So, how about
answering the question?

And college is a service delivered mostly by
workers with college degrees—whose salaries have risen more dramatically than
those of low-skilled service workers over the past several decades.

Uh, nope. Faculty
pay and faculty numbers have been
essentially flat, actually lower when you consider most faculty are
sub-minimum wage adjuncts who don’t even count into pay considerations. And it
is faculty who deliver the services here. But even if we were paid a lot, it’s
still not answering the question, because class sizes have swollen to huge proportions.

“The villain, as much as there is one, is
economic growth itself,” they write.

Um…no. If
economic growth were the issue, then everything else would increase in price by
a huge margin as well. We’d see this in other countries with economic growth if
this statement were true. We do not.

America’s higher-education system is that it is
actually three different systems masquerading as one: There is one system of
public colleges; another of private, nonprofit institutions; and one made up of
for-profit colleges.

Finally, the
Atlantic says something correct…but interprets it wrong. All those systems
would increase competition, and yet another economic principle is competition
drives prices down. It’s a shame economics is such an obscure topic that our
mainstream rags don’t even have a rudimentary understanding of it.

The Atlantic
submits page after page of complete confusion, for example:

All that said, it’s also true that state budget
cuts were uneven across the country. Today, in-state tuition in Wyoming is
about a third of the cost of Vermont, for example. In places where higher
education has not been gutted and the cost of living is low, an American
college degree can still be a bargain—especially for students who don’t mind
living at home and are poor enough to qualify for federal aid.

Wait…Federal aid?
You know, Federal aid in housing drove real estate prices up, and Federal
involvement in health care drove prices up. The
Atlantic doesn’t know these things, and so misses the cue here, with no ability
to guess what Federal aid in education would do.

“Universities extract money from students because
they can…It’s the inevitable outcome of an unregulated fee structure.”

No, it’s not the unregulated fee
structure. Bottled water doesn’t have a regulated fee structure, after all, and
yet we still don’t see bottles of water going for $20,000 apiece. More
government interference, more regulation, is not the answer.

Over a lifetime, people with bachelor’s degrees
earn more than half a million dollars more than people with no college degree
in the U.S.

Hey, remember when the line was “over a
million dollars”? I sure do. Now it’s only half a million? This still isn’t answering
the question, though.

After fumbling forever, the author never
gets around to answering the question, but offers up this hysterical chestnut:

This convoluted, complicated, inconsistent system
continues to exist, and continues to be so expensive because college in America
is still worth the price. At certain colleges, for certain people. Especially
if they finish. But it doesn’t have to be this way, and almost everywhere else,
it isn’t.

Still worth the price? I have my doubts.
We now have close to three times as many people with student loan debt than we
have college students, but the debts are quite inescapable for many of them.
Continuing to screech about how college is worth it “at any price” is just
suckering more people into the death spiral of college debt, and The Atlantic
does the public a grave disservice by saying the above. They merely add insult
to injury by at no point considering how the huge student loan scam has been a
factor in skyrocketing tuition here.